Tue, 16 Feb 2010

Jakarta (ANTARA News) - The income of coal companies may drop by Rp17 trillion this year due to the implementation of Law Number 26 of 2007, Bob Kamandanu said here on Monday.

The chairman of the Association of Indonesian Coal Miners (APBI) said if the law on spatial arrangement was implemented the operations of coal mining companies should be stopped because their land use permit would not be able to be extended.

"The forestry ministry could no longer extend the permit for coal mining in forest lands," he said.

The provision put in Article 37 of Law Number 26 of 2007 will affect as many as 60 companies which are members of the APBI), he said.

"Our permit application is not approved. It means we can no loner operate. Under the situation coal industry could lose Rp17 trillion in 2010 which is a source of state income," he said.

Bob said the calculation was still rough based on total value which could reach hundred trillion rupiahs.

"The Rp17 trillion figures are obtained based only upon 25 percent of total companies presumed to be affected," he said.

He said the revocation of permits would affect not only mining areas but also mining facilities such as roads and ports.

He said the facilities of 90 percent of coal mines in Indonesia were built in the forest area.
He admitted he could not as yet tell how many companies whose permits would not be extended as they had different expiration dates.

He said the APBI only knew about the expiration of the permit in December 2009 but APBI would continue to conduct consolidation with regard to the matter with the forestry ministry.

Based on data he said last year`s production reached 250 million tons and therefore if 25 percent of the companies would be affected Rp17 trillion of state income would be lost.

"The state income consists of taxes and royalties which are worth 60 percent of the sale value of coal production," he said.

On the occasion Bob also said power plants that rely on coal as their energy source could be threatened due to decreasing production.

Supply has stopped to several coal-fired power plants in Java such as from companies in Jorong that supply PLTU Asam-Asam and PLTU Cilacap.

"Under the conditions all coal companies operating in forest areas may stop production this year including those supplying the two power plants," he said.

In connection with the situation he said he planned to file for a judicial review of the law. "A lot of APBI members`s applications stopped at the ministry of forestry. Therefore we will file a judicial review," he said.(*)